is is much easier than sending multipleencrypted emails to carriers.”Security has been a top consideration ofthe Insurance Exchange from the outset,according to Lynch. “We understand ourrole as an industry player,” he says. “One ofthe things we did [to ensure security] wasthat we gave up control of the data to theExchange Trust.”Some brokers say using the InsuranceExchange adds a level of security they hadnot had with traditional email. “With theexchange, underwriters get an email witha link to obtain the submission in a secureenvironment, which is a real improve-ment,” says Crerar.

“More and more large clientsare asking that their proprietaryinformation be encrypted,” saysFitch. “The exchange can be ameaningful standard for that.”The Insurance Exchangealso adds consistency to thebroker-underwriter transac-tion by consolidating risk in-formation in a central location, a featurethat benefits the audit process as well.Says Pruett: “Now, there’s a permanent re-pository of all the communication betweenproducer and carrier.”From a technology standpoint, some re-maining bugs being worked through includein-progress integration between agency-management systems. Among leading ven-dors, Vertafore and Nexsure report real-timeupload with the Insurance Exchange, whileApplied Systems, which has in the pastconsidered the exchange as a competitor,did not provide information regarding anyintegration capability. Additionally, usingan integrated platform is no guarantee thatintegration has been enabled at a particularagency by default.

“As the upload feature between our
agency-management system and LexisNexis is still not operational, we cannot
enjoy the potential benefits of this feature,” said Forkner of MHBT, which uses
Vertafore’s Sagitta platform.

Brian D. Bartosh, president of Top O’
Michigan Insurance Agency Inc., says the

“Insurance Exchange” hasn’t quite lived
up to its name.

“Right now, most of the carriers getting [an exchange submission] can see the
information, but they need to extract it,”
he says. “It’s an application exchange, but
not a data exchange.

“Some of the things that are nice are the
way [the system] puts the submission together and allows us to track submissions,
but we use our agency-management system [Applied’s TAM] for that,” he explains.
“The LexisNexis solution, the way it was
presented, is that you can present submissions to carriers, and they don’t have to be

RIGHT NOW, most of the carriers
getting [an exchange submission] can
see the information, but they need to
extract it. It’s an application exchange,
but not a data exchange.”

Brian D. Bartosh, president of
Top O’ Michigan Insurance Agency Inc.

members. But once they do that, it creates
a ‘super PDF.’ We felt it was too disconnected from the process.”

CARRIER RECALCITRANCE

But brokers report that the biggest obstacleto greater adoption of the exchange is thereluctance of carriers. Although any insur-er can receive data via email through theexchange, whether they will is a differentstory. “In the beginning, some carriers toldtheir underwriters not to accept it, but wedon’t have that situation anymore,” saysPruett. “No carrier is fully bucking us.”“This is an industry that can always findreasons not to do something,” adds Crerar.“There are no real impediments [to the In-surance Exchange] other than will and fear.”“Carriers need to get over their mental-ity that brokers are going to go to a bunchof different Web sites,” says Henry, addingthat he has contacted all MHBT’s carriersabout being Insurance Exchange members.“I’ve said, ‘You are going to put yourself ata disadvantage compared to other carriersthat are cooperating,’” he explains.

Rather than worry about being “spread-sheeted,” carriers should look to the ad-vantages of the system, its proponentssay. “It comes down to self-interest,” Fitchexplains. “The exchange positions us inthe industry where we might not havebeen positioned elsewhere because wehave a product in midmarket commerciallines that some of the bigger brokers andagents would not [otherwise see]. Thisputs us on [their] radar.”Fitch points to the exchange’s MarketFinder feature, with which brokers cangauge State Auto’s appetite for a particularaccount before sending an application, andthe insurer can disseminatenew information more quickly.“It allows us to do that differ-entiation and marketing at thespeed of light rather than relyon sending reps into the field,”he says.

Additionally, future development is planned. “We’re
starting to aggressively go after
all the brokers and agents out there, and as
we do that we will be adding capabilities
to the system,” says Crerar. That includes
expanding the system to multiparty transactions, such as larger and more complex
commercial lines, as well as small commercial and personal lines.

Time will tell if this effort will ultimately succeed where others have failed.
But while current usage may be less than
hoped for, proponents point out that the
adoption curve is steady.

“Thought leaders in this market are
very supportive and believe it has to happen, and users [of the exchange] have high
satisfaction,” says Lynch. NU

DIGITAL EXTRA
BB&T Insurance, one of the early adopters
of the Insurance Exchange, conducted an
evaluation this past March to determine
whether to expand its use nationally or
stop using it altogether. Digital subscribers
can CLICK to find out what they decided—
and the resulting impact on carriers.